Can a customs broker with the purchaser's power of attorney collect a sales tax export refund on the purchaser's behalf?

Plain-English summary

A taxpayer asked the Comptroller whether a licensed customs broker could bring export documentation to a retailer to obtain a sales tax refund, when the broker was acting under the purchaser's power of attorney and had been assigned the purchaser's right to the refund. The Comptroller said yes — this arrangement is acceptable and does not run afoul of Rule 3.323(e)(1).

Rule 3.323(e)(1) says that export documentation provided to the seller by someone other than the original purchaser listed on the seller's records is not acceptable proof of export, even if the documentation otherwise meets the rule's requirements. The Comptroller explained that this subsection was meant to stop third parties from fraudulently obtaining refunds using phony export documents paired with invoices for goods they never actually bought (for example, using someone else's discarded receipts). It was not meant to stop a purchaser from validly designating a third-party agent — through a power of attorney and an assignment of the refund right — to both deliver the export documents and collect the refund on the purchaser's behalf.

The Comptroller added that it would not enforce subsection (e)(1) in a way that penalizes a seller who relies in good faith on properly completed export documents, powers of attorney, and refund assignments, and noted that the Comptroller's office was considering rephrasing the rule to make this situation clearer.

What this means for you

Retailers who sell goods for export

If a purchaser's designated agent — such as a licensed customs broker — shows up with properly completed export documentation along with a valid power of attorney and an assignment of the refund right from the original purchaser, this letter indicates you may rely on those documents in good faith and issue the sales tax refund to the broker/assignee. The Comptroller stated it would not penalize a seller for doing so.

Purchasers of exported goods

You do not have to personally return to the retailer to collect your export sales tax refund. Based on this letter, you can authorize an agent (such as a customs broker) through a power of attorney and an assignment of your refund right to handle both the export documentation and the refund collection for you.

Customs brokers and other third-party agents

This letter supports the practice of a licensed customs broker presenting export documentation to a retailer and collecting the refund, provided the broker holds the purchaser's power of attorney and a valid assignment of the refund right. The Comptroller distinguished this from the fraud scenario that Rule 3.323(e)(1) was designed to prevent (third parties using phony documents and invoices for goods they didn't buy).

Accountants and tax professionals

This letter is a useful, narrow interpretation of Rule 3.323(e)(1): the rule's restriction on documentation from parties other than "the original purchaser listed on the seller's records" targets fraudulent refund schemes, not legitimate agency arrangements backed by a power of attorney and refund assignment. Note that the Comptroller mentioned it was considering rephrasing the rule at the time, so it's worth confirming the current text of Rule 3.323 rather than relying solely on this 1994 letter.

Common questions

Q: Can a customs broker collect a sales tax export refund on behalf of a purchaser?
A: Yes, according to this letter, as long as the broker has the purchaser's power of attorney and an assignment of the right to the refund.

Q: Doesn't Rule 3.323(e)(1) bar refunds based on documentation from anyone other than the original purchaser?
A: The rule does bar documentation "provided to the seller by a person other than the original purchaser listed on the seller's records," but the Comptroller explained this provision targets fraud (phony documents paired with invoices for goods the presenter didn't buy), not legitimate purchaser-authorized agents.

Q: Can a seller get in trouble for giving the refund to the broker instead of the purchaser?
A: This letter states the Comptroller does not intend to enforce subsection (e)(1) to penalize a seller who relies in good faith on properly completed export documents, powers of attorney, and refund assignments.

Q: Is this still the Comptroller's position today?
A: The letter itself notes that subsection (e)(1) was, at the time, being considered for rephrasing to better accommodate this situation, so readers should confirm the current text of Rule 3.323 rather than relying solely on this 1994 letter, which in any case can only be relied upon for detrimental-reliance purposes by the original recipient.

Citations and references

• 34 Tex. Admin. Code § 3.323(e)(1) — quoted in the letter as barring export documentation "provided to the seller by a person other than the original purchaser listed on the seller's records," which the Comptroller interprets as aimed at preventing fraudulent refund claims rather than barring purchaser-authorized agents.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9404L1295B01

Original ruling text

April 13, 1994

Dear **:

You recently asked me the following question: May a licensed
customs broker take export documentation to a retailer for a
sales tax refund if the broker has the purchaser's power of
attorney and assignment of the right to a refund? Response:
This procedure is acceptable, and does not violate Rule
3.323(e)(1), which says:

. . . Documentation of exportation provided to the
seller by a person other than the original purchaser listed
on the seller's records is not acceptable proof of export,
even if such documentation otherwise meets the requirements
of this subsection....

Subsection (e)( 1) was intended to prevent third parties
from obtaining tax refunds under false pretenses, using a
combination of phony export documents and invoices for goods
they did not buy (such as others' discarded receipts).
However, subsection (e)(1) does not change the fact that a
purchaser's power of attorney thirdd-party designee both to provide
export documents to the seller and obtain the tax refund. We
do not intend to enforce subsection (e)(1) in such a way as
to penalize a seller for relying in good faith upon properly
completed export documents, powers of attorney and refund
assignments. We are presently considering rephrasing
subsection (e)(1) to accommodate this type of situation.

This opinion is based on the facts presented. Different or
additional facts, though similar, might lead to different
answers. If you have any questions, please feel free to
write or call me at 1-800-531-5441, extension 3-3889.

Sincerely,

John Christian, General Law Section
Legal Services Division

NOTE: Previous Accession Number 9404221L